UN food aid to about 860,000 people in the Gaza Strip will have to be suspended within days if Israel's blockade continues, the UN has warned.
Most of Gaza's 1.4m people depend on humanitarian aid
Spokesman Christopher Gunness said the UN relief agency UNWRA was running short of nylon for plastic bags and fuel for vehicles and generators.
Israel closed Gaza's borders last Thursday in response to rocket attacks by Gaza-based militants.
The EU says Israel is "collectively punishing" the Hamas-run territory.
Egypt has urged Israel to lift its border closure and the crisis is being discussed by the Arab League.
With fuel supplies hit by the blockade, Gaza's only power plant, which produces 27% of the territory's electricity needs according to a recent UN report, was shut down on Sunday night.
Israel says it is still providing power to Gaza, putting its current contribution at nearly 70%, while Egyptian power stations account for the remainder.
Prime Minister Ehud Olmert says that while Israel does not want to provoke a humanitarian crisis, it does want to make people's lives "uncomfortable".
In another development, overnight Israeli air strikes in the Gaza City area killed one Palestinian and injured several others. Israel said it had been targeting militants transporting rockets.
Bread and rockets
On Monday morning residents awoke to closed petrol stations and shuttered bakeries unable to bake bread - a staple food in Gaza.
Generators are supplying critical power to hospitals
Generators are being used to maintain critical power supplies to hospitals but there are fears that supplies of diesel could soon run out.
Mr Olmert insists the Israeli action is limited to cutting fuel supplies for vehicles.
"As far as I'm concerned, all the residents of Gaza can walk and have no fuel for their cars, because they have a murderous terrorist regime that doesn't allow people in the south of Israel to live in peace," he said.
Israeli foreign ministry spokesman Ary Mekell told the BBC on Monday that the energy crisis in Gaza was a "a fabrication and a stage production by Hamas".
"There is no shortage of electricity - we provide 70% of the electricity for Gaza through electric cables and this is nothing to do with the fuel supplies," he said.
GAZA'S ELECTRICITY SOURCES
Gaza uses 187 megawatts of electricity
Israel supplies 64% of this, and Egypt 9%
The remaining 27% is produced by Gaza's power station
Israel supplies the fuel oil for the Gaza power station
Source: UN report, May 2007
A report by the UN humanitarian affairs agency Ocha in May 2007 estimated that Israel supplied 64% of Gaza electricity, the local power station - 27%, and Egypt - 9%.
After decades of occupation, Israel withdrew from the Gaza Strip in 2005, but it still controls the territory's borders and supplies.
Hamas - branded a terrorist organisation by the Israel, the US and the EU - has been in charge of Gaza since June, when it drove out rivals Fatah.
More than 200 rockets and mortars have hit Israel from Gaza since an Israeli operation against militants on Tuesday that left 18 Palestinians dead, the Israeli military says.
Egyptian President Hosni Mubarak telephoned Mr Olmert to warn him of the humanitarian effects of the blockade, and urged him to "stop the Israeli aggression".
Israel says border closures will stop if the rocket attacks end
He also raised the possibility of reopening the Rafah crossing between Gaza and Egypt, which Israel insists should remain closed.
Arab League officials gathered in Cairo for an emergency meeting but it is unclear what action it can take other than pushing for humanitarian relief.
The most significant action would be to reopen Gaza's crossing into Egypt but this would probably prove too controversial a step for the Egyptian government, the BBC's Ian Pannell reports.
In other reaction:
- The UK said it did not support the Israeli blockade and called for all parties to work for the reopening of the crossings. Reports that electricity has been cut because of fuel shortages are particularly alarming, it said
- International aid agency Oxfam said Gaza's water and sanitation system was "running on empty" with most pumps due to shut down by Tuesday
- EU external relations commissioner Benita Ferrero-Waldner spoke out against "this collective punishment of the people of Gaza" and called for an end to the blockade
- Iran called on foreign ministers of Islamic states to convene on the crisis
- Jordan said it was "deeply concerned" about Israeli "military violations" and Lebanese PM Fouad Siniora said Israel was escalating "racial discrimination... under the pretext of confronting Hamas"